Senate approves group pool insurance plan for small air carriers

JUNEAU (AP) -- The Senate approved a bill Monday to allow Alaska small air carriers to create insurance pools to ease the rising cost of coverage.

The bill comes in response to Alaska's high aircraft accident rate, court judgments and fewer companies willing to insure air services.

Rates have risen by as much as 300 percent and have threatened essential air service in some remote areas, said Sen. Robin Taylor, R-Wrangell, who sponsored the measure.

The bill would allow small air carriers to establish a self-insurance pool, and allow outside insurance companies to participate.

To do this, the air carriers would set up a $1.5 million capital and surplus account to entice insurance companies to participate, Taylor said.

Alaska law now requires passenger air services to carry at least $150,000 per seat coverage for injury or death.

Bob Lohr, director for the state Division of Insurance, said his department is not opposed to the measure. But he said the capital pool should be at least $5 million to entice insurance carriers to get involved.

The bill passed the Senate 20-0 and now goes to the House for consideration.